(b) Income tax rates
on dividends and net capital gain.—Section 303 of the Jobs and
Growth Tax Relief Reconciliation Act of 2003 is hereby
repealed.

(c) Effective
date.—The amendments made by this section shall take effect on the
date of the enactment of this Act.

SEC. 3. Estate and gift
tax permanently repealed.

Effective for estates of decedents dying,
gifts made, or generation skipping transfers, after December 31, 2010, subtitle
B of the Internal Revenue Code of 1986 is repealed.

SEC. 4. Permanent
individual AMT relief.

(a) Modification of
alternative minimum tax exemption amount.—

(1) IN
GENERAL.—Paragraph (1) of section 55(d) of the Internal Revenue
Code of 1986 (relating to exemption amount) is amended to read as
follows:

“(1) EXEMPTION AMOUNT
FOR TAXPAYERS OTHER THAN CORPORATIONS.—In the case of a taxpayer
other than a corporation, the term ‘exemption amount’ means—

“(A) the dollar amount
for taxable years beginning in the calendar year as specified in the table
contained in paragraph (4)(A) in the case of—

“(i) a
joint return, or

“(ii) a
surviving spouse,

“(B) the dollar amount
for taxable years beginning in the calendar year as specified in the table
contained in paragraph (4)(B) in the case of an individual who—

“(i) is
not a married individual, and

“(ii) is not a
surviving spouse,

“(C) 50 percent of the
dollar amount applicable under paragraph (1)(A) in the case of a married
individual who files a separate return, and

“(D) $22,500 in the
case of an estate or trust.

For
purposes of this paragraph, the term ‘surviving spouse’ has the
meaning given to such term by section 2(a), and marital status shall be
determined under section
7703.”.

(2) SPECIFIED
EXEMPTION AMOUNTS.—Section
55(d) of such Code is amended by adding at the end the following new
paragraph:

“(4) SPECIFIED
EXEMPTION AMOUNTS.—

“(A) TAXPAYERS
DESCRIBED IN PARAGRAPH
(1)(A).—For purposes of paragraph
(1))(A)—

“For taxable years beginning in—

The
exemption amount is:

2010

$72,450

2011

$74,450

2012

$78,250

2013

$81,450

2014

$85,050

2015

$88,650

2016

$92,650

2017

$96,550

2018

$100,950

2019

$105,150

2020

$109,950.

“(B) TAXPAYERS
DESCRIBED IN PARAGRAPH
(1)(B).—For purposes of paragraph
(1))(B)—

“For taxable years beginning in—

The
exemption amount is:

2010

$47,450

2011

$48,450

2012

$50,350

2013

$51,950

2014

$53,750

2015

$55,550

2016

$57,550

2017

$59,500

2018

$61,700

2019

$63,800

2020

$66,200.”.

(b) Alternative
minimum tax relief for nonrefundable credits.—

(1) IN
GENERAL.—Subsection (a) of section 26 of the Internal Revenue Code
of 1986 is amended to read as follows:

“(a) Limitation based
on amount of tax.—The aggregate amount of credits allowed by this
subpart for the taxable year shall not exceed the sum of—

“(1) the taxpayer's
regular tax liability for the taxable year reduced by the foreign tax credit
allowable under section 27(a), and

“(2) the tax imposed by
section 55(a) for the taxable
year.”.

(2) CONFORMING
AMENDMENTS.—

(A) ADOPTION
CREDIT.—

(i) Section 23(b) of
such Code, as in effect on December 31, 2009, is amended by striking paragraph
(4).

(ii) Section 23(c) of
such Code, as in effect on December 31, 2009, is amended by striking paragraphs
(1) and (2) and inserting the following:

“(1) IN
GENERAL.—If the credit allowable under subsection (a) for any
taxable year exceeds the limitation imposed by section 26(a) for such taxable
year reduced by the sum of the credits allowable under this subpart (other than
this section and sections 25D and 1400C), such excess shall be carried to the
succeeding taxable year and added to the credit allowable under subsection (a)
for such taxable
year.”.

(iii) Section 23(c) of
such Code, as in effect on December 31, 2009 amended by redesignating paragraph
(3) as paragraph (2).

(B) CHILD TAX
CREDIT.—

(i) Section 24(b) of
such Code is amended by striking paragraph (3).

(ii) Section 24(d)(1)
of such Code is amended—

(I) by striking
“section 26(a)(2) or subsection (b)(3), as the case may be,” each
place it appears in subparagraphs (A) and (B) and inserting “section
26(a)”, and

(II) by striking
“section 26(a)(2) or subsection (b)(3), as the case may be” in the
second last sentence and inserting “section 26(a)”.

(C) CREDIT FOR
INTEREST ON CERTAIN HOME MORTGAGES.—Section 25(e)(1)(C) of such
Code is amended to read as follows:

“(C) APPLICABLE TAX
LIMIT.—For purposes of this paragraph, the term ‘applicable
tax limit’ means the limitation imposed by section 26(a) for the taxable
year reduced by the sum of the credits allowable under this subpart (other than
this section and sections 23, 25D, and
1400C).”.

(D) SAVERS'
CREDIT.—Section 25B of such Code is amended by striking subsection
(g).

(E) RESIDENTIAL
ENERGY EFFICIENT PROPERTY.—Section 25D(c) of such Code is amended
to read as follows:

“(c) Carryforward of
unused credit.—If the credit allowable under subsection (a)
exceeds the limitation imposed by section 26(a) for such taxable year reduced
by the sum of the credits allowable under this subpart (other than this
section), such excess shall be carried to the succeeding taxable year and added
to the credit allowable under subsection (a) for such succeeding taxable
year.”.

(F) CERTAIN PLUG-IN
ELECTRIC VEHICLES.—Section 30(c)(2) of such Code is amended to
read as follows:

“(2) PERSONAL
CREDIT.—For purposes of this title, the credit allowed under
subsection (a) for any taxable year (determined after application of paragraph
(1)) shall be treated as a credit allowable under subpart A for such taxable
year.”.

(G) ALTERNATIVE
MOTOR VEHICLE CREDIT.—Section 30B(g)(2) of such Code is amended to
read as follows:

“(2) PERSONAL
CREDIT.—For purposes of this title, the credit allowed under
subsection (a) for any taxable year (determined after application of paragraph
(1)) shall be treated as a credit allowable under subpart A for such taxable
year.”.

(H) NEW QUALIFIED
PLUG-IN ELECTRIC VEHICLE CREDIT.—Section 30D(c)(2) of such Code is
amended to read as follows:

“(2) PERSONAL
CREDIT.—For purposes of this title, the credit allowed under
subsection (a) for any taxable year (determined after application of paragraph
(1)) shall be treated as a credit allowable under subpart A for such taxable
year.”.

(I) CROSS
REFERENCES.—Section 55(c)(3) of such Code is amended by striking
“26(a), 30C(d)(2),” and inserting “30C(d)(2)”.

(J) FOREIGN TAX
CREDIT.—Section 904 of such Code is amended by striking subsection
(i) and by redesignating subsections (j) , (k), and (l) as subsections (i),
(j), and (k), respectively.

(K) FIRST-TIME HOME
BUYER CREDIT FOR THE DISTRICT OF COLUMBIA.—Section 1400C(d) of
such Code is amended to read as follows:

“(d) Carryforward of
unused credit.—If the credit allowable under subsection (a)
exceeds the limitation imposed by section 26(a) for such taxable year reduced
by the sum of the credits allowable under subpart A of part IV of subchapter A
(other than this section and section 25D), such excess shall be carried to the
succeeding taxable year and added to the credit allowable under subsection (a)
for such taxable
year.”.

(c) Effective
date.—The amendments made by this section shall apply to taxable
years beginning after December 31, 2009.

SEC. 5. Maximum corporate
income tax rate reduced to 25 percent.

(a) In
general.—Paragraph (1) of
section 11(b) of the Internal Revenue Code of 1986 is amended by striking
“but does not exceed $75,000” and all that follows and inserting a
period.

(b) Personal Service
Corporations.—Paragraph (2) of
section 11(b) of such Code is amended by striking “35 percent” and
inserting “25 percent”.

(c) Conforming
Amendments.—

(1) Subsection (a) of section 1201 of such Code
is amended by striking “35 percent” each place it appears and
inserting “25 percent”.

(2) Paragraphs (1) and
(2) of section 1445(e) of such Code are each amended by striking “35
percent” and inserting “25 percent”.

(d) Effective
date.—The amendment made by this section shall apply to taxable
years beginning after December 31, 2010.